EOG, Pioneer Resources lead energy stock rally

Sector holds on to gains after Fed meeting

By

SteveGelsi

NEW YORK (MarketWatch) — EOG Resources and Pioneer Natural Resources rose in a busy earnings day for independent oil and natural gas producers on Wednesday, as the energy sector outpaced the broad equities market into positive territory.

Private Sector Ads 110,000 Jobs in October

Energy producer EOG Resources
EOG, +1.52%
ranked near the top of the advancers column among components of the S&P 500:
SPX, +0.28%
with a gain of 10.9%.

The company’s third-quarter earnings of 83 cents a share beat the Wall Street forecast of 79 cents a share, according to a survey by FactSet Research. EOG’s production of 427,000 barrels of oil equivalent also beat the analyst target of 423,000 barrels.

Pioneer Natural Resources
PXD, -0.54%
jumped 8.4% after it said its third-quarter profit increased to $351.2 million, or $2.95 a share, from $112 million, or 94 cents a share, in the year-ago period.

Breaking out $1.60 for unrealized gains in derivatives, as well as a one-time gain of 21 cents a share, Pioneer earned $1.14 a share.

Revenue rose to $1 billion from $586 million.

Production increased 9% to 128,000 barrels oil equivalent per day. Wall Street analysts expected Pioneer to earn 89 cents a share on revenue of $644 million, with total production of 129,400 barrels of oil equivalent a day, according to a survey by FactSet Research.

Looking ahead, Pioneer said it expects 2012 production growth of at least 20% as it moved ahead with drilling plans for the Spraberry field, the Eagle Ford Shale and the Barnett Shale.

Pioneer also expects a compound annual production growth rate of at least 18% through 2014.

Devon Energy Corp.
DVN, +0.40%
said its third-quarter earnings fell to $1 billion, or $2.50 a share, from $2.1 billion, or $4.79 a share, in the year-ago period. Last year, Devon booked a one-time gain of $1.5 billion resulting from the divestiture of assets in Azerbaijan.

Excluding a an unrealized before-tax gain on oil, gas and natural gas liquids derivatives of $642 million and other items, the company earned $1.54 a share.

Revenue rose to $3.5 billion, from $2.35 billion.

Wall Street analysts expected Devon to earn $1.46 a share on revenue of $2.45 billion, according to a survey by FactSet Research.

Total production of oil, natural gas and natural gas liquids increased by 8% to 661,000 oil-equivalent barrels a day, compared to the Wall Street target of 662,000.

Liquids production rose 17% to 226,000 barrels a day.

Devon increased its production in the Permian Basin by 17%. It also added 11 new wells to production at the Bone Spring play in the Permian Basin.

Shares of Devon rose 3%.

Checking the major energy sector benchmarks, the NYSE Arca Oil Index (XOI) rose 1.3%. The NYSE Arca Natural Gas Index (XNG) moved up by 2.2% and the Philadelphia Oil Service Index
OSX, +0.21%
advanced by 0.8%.

El Paso swings to loss on Ruby investment loss

El Paso Corp.
EP
swung to a third-quarter loss of $368 million, or 48 cents a share, compared to net income of $133 million, or 19 cents a share, in the year-ago period.

The latest quarter included a non-cash loss of 39 cents a share on the difference between the net carrying value of its Ruby investment and the estimated fair value of El Paso’s net investment. Adjusted net income in the latest period totaled 18 cents a share. Operating revenue climbed to $1.4 billion, from $1.2 billion.

Wall Street analysts expected El Paso to earn 26 cents a share on revenue of $1.25 billion, according to a survey by FactSet Research. Third-quarter production rose 8% to 827 million cubic feet equivalent per day. El Paso said it’s “very excited” about its pending sale to Kinder Morgan
KMI, -0.12%
.

Shares of El Paso rose 0.3%.

Enterprise Products, Chesapeake ink Utica shale pipeline deal

Enterprise Products Partners L.P.
EPD, -0.33%
said Chesapeake Energy Corp.
CHK, +0.92%
agreed to move up to 75,000 barrels a day over a five-year period through Enterprise’s proposed 1,230-mile ethane pipeline from the Marcellus and Utica shale regions in Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast.

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